Apportionment of Overhead Expenses -Bases of Apportionment

 Overhead/Apportionment - Bases of Apportionment

Expense Category

Basis of Apportionment

Direct Expenses

Directly attributable to a specific cost object/department

Indirect Expenses

Factory Rent

Floor area occupied by each department

E.S.I

Wages of  each department

Electricity

Kilowatt-hours consumed by each department (if metered)

Water

Number of employees, or specific usage (e.g., cooling)

Salaries (Admin/Support)

Number of employees, time spent, or workload

Depreciation

Value of assets used by each department

Insurance

Value of assets, risk profile of each department

Maintenance & Repair

Usage of equipment, machine hours, or specific requests

Cleaning

Floor area occupied, or number of workstations

IT Support

Number of computers, number of users, or support tickets

Marketing

Sales revenue generated, number of products sold

General Overhead

Often based on a general activity driver (e.g., labor hours)

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